Maharashtra may miss property registration target this fiscal

PUNE: The demonetisation move and an expected fall in realty prices have taken a huge toll on property registrations across the state.

The impact of these two factors is quite visible in the earnings of the state property registration department. Against its revenue target of Rs 23,548 crore for the current financial year (FY16-17), the department has managed to mop up just Rs 13,821 crore till December 15, which is only 59% of the target amount.

Going by the current trend, there are chances that the department may fall short of its target for the first time in the last three financial years. Between FY14 and FY16, the department had achieved more than its set target in revenue.

“The demonetisation move and the prevailing ‘wait-and-watch attitude’ adopted by the market has slowed down property registrations significantly. This has, in turn, slowed down the revenue collection from an average Rs 90 crore per day between April to October this year to Rs 60 crore per day now in the eight divisions across the state,” officials from the department told TOI. The overall dip in registrations after the demonetisation move stands at 33%, they added.

“Although, we will try our best to meet the target, it looks difficult in the face of the prevailing situation. When the ready reckoner rates were increased by 6%, the government escalated our targets by 12%. The demonetisation move is an added factor, which has led to a dip in the registrations,” N Ramaswamy, Inspector General of Registration (IGR) and Controller of Stamps, said.

The state had pushed its target revenue higher this time based on the actual sales in specific radius against the ready reckoner rate. The IGR said Mumbai, which generates about 40% of the revenue for the department, had earlier gone slow in the registrations in anticipation of the new Development Plan (DP) that was to provide added sops. “While the main city areas have registered a dip, the rural areas of Nagpur, Amravati, Nashik and Latur too have seen reduced registrations,” he added.

Deputy IGR (Headquarters) Chintamani Bhurkunde said the registrations have come down across divisions after the demonetisation move. “People are waiting for the Reserve Bank of India to cut rates. If this happens, the banks will briong down the rates of home loans. Also, potential buyers are waiting for the property prices to come down in the face of the prevailing cash crunch. The wait-and-watch policy is affecting the registrations,” he added.

The officials said every division has reported a dip in average monthly revenue after the demonetisation announcement. “In terms of revenue realization, Mumbai is way ahead of other cities and towns in the state followed by Thane and Pune. While the registrations are high in Pune, the value of the properties and revenue generated is highest in Mumbai,” the officials added.

Experts from the realty sector said the decline in the registrations was expected. “People are hesitant to go for any deal now because they are hoping that the rates would come down further and there would be sops announced in the annual budget. They are waiting for the budget session. This is definitely taking a toll on the property department’s revenue,” a realty agent from Bavdhan said.

“And the situation is unlikely to improve any time soon,” a senior revenue official said.

Currently, the Goods and Services Tax (GST) is levied at 12 per cent on payments made for under-construction property or ready-to-move-in flats where completion certificate has not been issued at the time of sale.